The leasing of large amounts of space by companies is one of the reasons why more than 500,000 square-feet of vacant space have been absorbed in the last year.

That news comes from Greg Gunn, associate broker for the Consolidated Realty Group, who presented the results of his semiannual office trends survey to members of the Salt Lake Chapter of Building Owners and Managers Association in Little America during a pre-budget meeting.Gunn, who has been involved in commercial real estate for 18 years, said he can't remember a time when so many large businesses or organizations are moving into the area and leasing large blocks of space.

He said the FBI is moving from the Federal Building into 80,000 square feet of space in the 257 Tower, a national finance company has taken 60,000 square feet, a financial services company has leased 50,000 square feet, a telemarketing company has leased 12,000 square feet that could expand to 100,000, another corporation is looking at 150,000 squarefeet, a telecommunications company is after 250,000 square feet and an insurance company wants 50,000 square feet.

Gunn said favorable publicity about Utah as a good place to live and run a business is one of the major reasons companies are leasing large amounts of space.

Another trend, Gunn said, is the American Disabilities Act, which is costing building owners and managers thousands of dollars. He said building operating expenses also are increasing because some previously deferred expenses are being recognized, real estate taxes are increasing and Salt Lake City has imposed the new storm drainage tax.

He said rent concessions have hit their peak because 500,000 square feet of office space were absorbed and few blocks of office space larger than 10,000 square feet are available in the southeast quadrant of the valley.

Although no new office space is being constructed downtown, Gunn said there is construction in other parts of the valley and most of that space has been leased.

He encouraged anyone looking to lease or buy office space to do so now because there are few choices in some segments of the market, operating costs are increasing and money is tight for construction and tenant improvement allowances.

His survey covered 15.5 million square feet of space in 200 buildings, which showed 19 percent vacancy. "For the most part, the market is improving, and with limited new supply of space, rates are certain to rise," Gunn said.

Kelly Matthews, senior vice president and economist for First Security Corp., said the United States is facing severe economic problems because it finds itself in a different kind of economic environment.

Even in the face of lowered interest rates, nothing indicates when the economy will start improving, Matthews said. He said the slump could be blamed on a reluctance by business to incur new debt, concern over the national debt and the uncertainty over who will be elected president.

Matthews said banks have plenty of money to lend, but they want more equity from developers to prevent a repeat of the savings and loan fiasco. "I am not anticipating much good news next year. I just hope we can maintain the status quo," he said.